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Clean Earth Remediation and Construction Services, Inc. v. American International Group

August 23, 2007


The opinion of the court was delivered by: Pitman, United States Magistrate Judge


I. Introduction

Defendants/Third-Party Plaintiffs, National Union Fire Insurance Company and American International Group, Inc. (collectively, "Defendants"), move for an Order pursuant to Fed.R.Civ.P. 37 directing plaintiff to answer certain interrogatories, to preclude plaintiff from offering certain evidence and for other sanctions (Docket Item 28). For the reasons set forth below, defendants' motion is granted in part and denied in part.

II. Facts

This is an action for damages arising out of a complicated series of transactions. Plaintiff, a remediation and construction company, contracted with the City of New York to perform remediation work in connection with a landfill restoration project in Brooklyn, New York. The contract required that plaintiff post performance and payment bonds for the benefit of the City of New York; defendants acted as the surety on these bonds. In an irony of ironies, Polar Capital, the escrow agent that was apparently retained to minimize the likelihood of diversion of funds from the site's owner, allegedly embezzled or otherwise lost the funds. After Polar Capital failed to comply with requests from both plaintiff and defendants to return the $2 million in escrow, plaintiff sued Polar Capital in New Jersey Superior Court and recovered a portion of the monies. Plaintiff now brings suit in this Court to recover the monies not recovered by the judgment in New Jersey, as well as legal fees that it has allegedly incurred.

On March 31, 2006, defendants served plaintiff with interrogatories concerning plaintiff's claims and its affirmative defenses to defendants' counterclaim*fn1 (Certification of James Mulvaney, Esq. in Support of Defendants' Motion for Discovery Relief, Sanctions and Related Relief, dated January 31, 2007 ("Mulvaney Cert."), ¶ 6 & Ex. 4).

When answers were not forthcoming in a timely manner, defendants informally requested that plaintiff's counsel respond to the interrogatories on multiple occasions from June 2006 through November 2006 (Mulvaney Cert. ¶ 8). On or about November 28, 2006, defendants wrote to my Chambers and requested a conference pursuant to Local Civil Rule 37.2 of the United States District Court for the Southern District of New York prior to filing a motion for sanctions based on of plaintiff's failure to respond to the interrogatories (Mulvaney Cert., Ex. 5). As a result of this letter, I conducted a tape-recorded conference call to address this issue on December 7, 2006. During the conference, plaintiff's counsel, William Kerr, admitted that he had repeatedly promised and failed to provide answers to the interrogatories; Mr. Kerr explained that his delay was due, in part, to the fact that he had been recently diagnosed with an illness that rendered him unable to complete the requests in a timely manner (Conference call held on December 7, 2006). As a result of the conference call, I issued an Order directing plaintiff to respond to the interrogatories no later than December 15, 2006 (Order dated December 8, 2006).

Counsel for defendants wrote to counsel for plaintiff on December 21, 2006, advising that defendants found the responses to the interrogatories to be "wholly unresponsive," and cited to plaintiff's failure to provide "fact(s) upon which [plaintiff] would rely to prove [its] allegations and separate defenses" (Mulvaney Cert., Ex. 9). Counsel for both parties had a telephone conversation to discuss the responses to the inter-rogatories on December 28, 2006. Defendants claim that plain-tiff's counsel conceded during that call that the interrogatory responses provided no facts in support of plaintiff's allegations. Defendants also claim that plaintiff's counsel suggested that plaintiff might be willing to drop certain counts in the complaint if it were allowed to amend certain other counts; according to defendants, counsel agreed that such amendment would have rendered at least two of the interrogatories moot (Mulvaney Cert. ¶ 18). During the telephone conversation, defendants also agreed that Interrogatory 6 needed no further response, and that Interrogatory 9 was duplicative of Interrogatory 7 so that only Interrogatory 7 needed a more complete answer (Mulvaney Cert. ¶ 20).

Defendants also claim that during the call they insisted that, with the exception of Interrogatories 6 and 9, plaintiff must provide "complete and full responses" whether or not the complaint was actually amended (Mulvaney Cert. ¶ 20). Defendants contend that plaintiff's counsel agreed to these conditions and further agreed to provide a letter confirming this agreement and to file a motion for leave to amend with the Court (Mulvaney Cert. ¶ 22). Plaintiff never confirmed the purported agreement in writing, never moved to amend the complaint and never provided supplemental answers to the interrogatories (Mulvaney Cert. ¶ 23).

Plaintiff's description of the December 28, 2006 telephone conference is materially different. Plaintiff claims that defendants were unwilling to explain the nature of the alleged deficiencies in the interrogatory answers except to assert that they were incomplete (Pl. Opp. at 5). Plaintiff further claims that it never agreed to supplement the answers to all of the interrogatories (Pl. Opp., at 5 n.2). Plaintiff also contends that while it did offer to withdraw counts certain counts of the complaint, defendants still required all the interrogatories to be supplemented (Pl. Opp., at 5-6).

Defendants claim that plaintiff has not provided responsive answers, and that it provided "stock answers" to "virtually every interrogatory seeking facts upon which Plaintiff would rely in support of its allegations in the complaint" (Brief of Defendants in Support of Motion for Discovery Relief, Preclusion of Evidence, a Finding of Contempt and For Fees, dated January 31, 2007 ("Def. Mtn."), at 7). Specifically, defendants argue that plaintiff improperly objected to the interrogatories on the grounds that they were "an attempt to elicit trial strategy, that the information was protected by the attorney work product doctrine or that the interrogatory was overly broad, unduly burdensome, vague, ambiguous and not reasonably calculated to lead to the discovery of admissible evidence" (Def. Mtn. at 7).

In the pending motion, defendants move for: (1) an Order declaring plaintiff in violation of my December 8, 2006 Order and compelling it to provide answers; (2) preclusion of plaintiff from offering evidence in support of its claims and affirmative defenses; (3) a finding that plaintiff is in contempt of Court; (4) the costs of the motion; and (5) such other sanctions as the Court deems appropriate (Def. Mtn., at 1).

Plaintiff argues that none of the relief defendants seek is warranted because it is in full compliance with my December 8, 2006 Order and properly answered the interrogatories by December 15, 2006. Plaintiff further contends ...

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